Students and Colleges Temporarily Shielded by Congressional Deal

As Congress reached a deal, students have been protected from many effects of the fiscal cliff.During a meeting late Tuesday night, the members of Congress passed a bill to shield Americans from the worst effects of the fiscal cliff, including those that would impact students across the country. The deal will prevent substantial tax increases for millions of individuals, as well as postpone spending cuts that would drastically impact federal funds for university research and student aid, The Chronicle of Higher Education reports.

The legislation upholds the American Opportunity Tax Credit for five years, allowing families to claim as much as $2,500 per year for college expenses. Along the same lines, Mark Kantrowitz, founder of Finaid.org, told The New York Times that the Tuition and Fees Deduction was also extended through the end of 2013, giving families the chance to claim up to $4,000 in tuition expenses.

While this comes as positive news for students, many of the negative effects of the fiscal cliff have only been postponed. Kantrowitz said the bill includes a two-month delay in sequestration, or across-the-board budget restrictions. If Congress does not act before March 1, this sequestration could lead to an 8.2% reduction in student aid funding, which would impact students' ability to receive work-study opportunities and Pell Grants.